MoJo

When we have such issues, we generally do a VCP to obtain relief to do a retroactive participation agreement and related changes to the plan (our documents makes it a multiple employer plan whenever a non-controlled group member participating employer signs on). We *never* retroactively amend to correct without the VCP filing....

"Learn"? What is this "learn" you speak about? I expect to pick the brains of those who know, so I don't have to! Beside, too many "baseball promotions" have resulted in a diminished capacity to learn!

I remember that! Of course to the extent I remember that, you may conclude I was not there.....

If you follow through the exemptions, and the other statutes referenced in the exemptions list above, you will find that included in the list of exemptions is the "federal" exemptions from bankruptcy estates (i.e. property that is not considered available to pay creditors in a bankruptcy). ONE of those exemptions is the "debtors" interest in a qualified retirement plan. By the way, the DOL's position is that retirement plan assets are NOT attachable under the MVRA. Not sure I want to get in between the DOJ and the DOL on this one, but I just confirmed the DOLs opinion (informally) this morning.

I don't know the counsel or the caution would have been different - nor our taking direction to pay it should an appropriate fiduciary direct us to do so, BUT, I probably would be more strenuous in advising them to seek guidance from ERISA counsel - as I believe that if this is not an appropriate attachment of plan benefits, it becomes a qualification issue for the plan. Both of the ones I recently received had counsel representing them - both to protect their interests in the criminal case against the former employee - as well as with civil recovery - and those lawyers were from large firms with robust ERISA practices. I suggested they engage an ERISA attorney to discuss - and whether they did or not I don't know. I documented that "guidance" on my part in writing in emails to the plan sponsor and their counsel, well, just for CYA.

Timely, but probably short. OJ wasn't convicted of the murders - and the state court civil judgments against him wouldn't qualify for the "FEDERAL" criminal victim restitution forfeiture law. He's in the clear as far as the monster judgment is concerned - unless and until he takes distributions. But, still timely....

Yea. That's why I followed it back. Anti-alienation has but two exceptions - QDROs and tax liens (when distributeable). This is neither - and to date, I've not seen anyone who was willing to challenge (as I said, both victims were the former employer/plan sponsor). Since we are a non-discretionary directed bundled shop, when they said "pay it" (after we gave them a caution and told them to talk to ERISA counsel), we paid it.

The orders I've received (from two different jurisdictions) were virtually identical and both contained language indicating 1) the statutory authority to "generally" order financial institutions to turn over assets in their control/custody (the federal victims restitution law); and 2) a provision indicating "unless" exempt under a list of several statutes (I don't have them in front of me so I can't cite them now specifically). The list of "exemptions requires following through because one of them says x, y, z, and anything in subsections a, b, or c, of this other statutes. Tracking it all back, you get to the bankruptcy code general exemptions of things not subject to attachment for payment of debts, and one of those is qualified retirement plans (with some caveats).

Just had two "turnover" orders from two federal district courts ordering the turn over of participant balances as restitution for their criminal activity. Each of those orders contained language indicate that only the net after withholding of required taxes needed to be forwarded to the clerk. So, yes, I believe taxes are withholdable from such distributions, and would think so even if the order didn't specify (not much trumps tax withholding rules). By the way, I've followed through the statutory authority specified in orders we've received and I don't believe the feds actually have authority to hit a qualified retirement plan. The orders specified the turn over of all funds not specified as exempt in a slew of statutes - which in turn references other statutes, etc., one of which is the general bankruptcy exemption list - which exempts qualified retirement plans. I've raised this issue with the prosecutors involved and they never heard of anyone ever questioning their authority. Bottom line, we complied - but in both cases the victim was the plan sponsor (and employee embezzled funds) and the "fiduciary" directed us to comply.

I think the decision rests on materiality - and that is a judgment on the part of management. Does the grievance have "merit?" Is there a likelihood that the union will prevail? What are the costs shold the union prevail? I agree with David Rigby - that erring on the side of caution is appropriate - but that doesn't always mean it needs to be disclosed.

I was thinking it was time to cut the umbilical court....

We tend to "over" distribute. "Substantial" is a judgement call, and we look at it as "how long would the SMM be" as well as how many SMMs have been issued since the last SPD, and then if we think it or cumulatively "them" have a substantial impact, re-issue the SPD. For us, it's an "automated" process (and we actually don't distribute - but provide it to the plan sponsor to do so). For PPA - even though the plan "specifics" weren't substantially changed, enough was changed to require a restatement, so I think it requires a new SPD.

"...take my wife... ... ... please!" - Henny Youngman. Couldn't resist....

Sympathy for the mom? OK, maybe - but her "interest" in the plan (before the marriage) ONLY becomes real if her son dies - and she has, in fact, gained a "daughter in-law." Good or bad for mom - who knows, but apparently the son thought this was a step in the right direction. I see no possibility of the Feds "protecting" beneficiary rights (pre-death) - keep in mind, you DON'T need to name a beneficiary at all and can leave it all to the plan/code/probate to sort it all out (which I NEVER recommend). Beneficiary rights are "contingent."

ERISA doesn't prohibit loans to participants who have terminated employment, but the plan may do so - simply because most employers require loan repayments via payroll deduction (which requires that you be employed) and don't want to mess with receiving a bunch of checks from former employees....

This is really a question for you HR department and/or the recordkeeper that handles your plan. Many (most?) recordkeepers don't accept partial payments because their systems don't easily track the change in principle/interest that occurs when that happens. Some allow for partial payments in an exact multiple of your payment amount - but all that does is actually advance you x number of payments on your amortization schedule. Others may be able to handle partial payments. I think if you want flexibility, you best option is to secure the funds elsewhere and pay off your plan loan in its entirety.

Yea. It's a perpetual problem that I've been involved in dealing with for a good part of my career at a number of service providers. RBG is right in that it can make the loan unenforceable - but then again, if the participant doesn't pay it according to the terms, the tax consequences are based in FEDERAL law - which some would argue supersedes the unenforceability of the loan under state law. Our approach is to tell our clients/plan sponsors who have employee participants in Florida of the requirement of the law, and that *we don't undertake any responsibility* for complying - and leave it up to them.

No doubt! But then again, there are some things that you can never be compensated enough for....

Well, I just have to say this - but 1) you've told the participant that what will happen if he dies without a revised beneficiary form; and 2) you are under no obligation to "prove" anything. If he wants a "legal" opinion, he can go hire his own attorney. Which leads to finally 3) he's an idiot if he thinks doing nothing because you can't "prove it" actually means anything - because the bene form only becomes effective when he dies - AND THEN HE'LL HAVE NO SAY IN THE MATTER, AND MOM GET'S NOTHING ANYHOW. Sorry for the harsh tone - but I've spent the last couple of years dealing with people who do things because they don't trust what you've told them (like they don't get NUA tax treatment for an in-service distribution under age 59-1/2 and then they go and take $800,000 worth of stock anyway - and COMPLAIN, or the tax consequences of a defaulted loan are not at all contingent on whether or not they received a "demand" letter sometime in the TWO YEARS since they stopped making payments - stuff like that.. Participants either believe you,. or they suffer the consequences.. I don't waste much time on "convincing" or proof anymore.

If it is subject to the participant's Cash Or Deferred Arrangement election, it's a CODA subject to testing as such. The year in which the participant could have taken it as cash is the year in which the deferral is counted as such.

I can assure they are not pleased - and to the extent some of the questions are related to services provided by us, they aren't happy with *us* and just want the audit closed - no matter what we think is appropriate, or what it would cost us to change business processes to suit the often unreasonable demands of the DOL (as an example - they don't understand the group annuity business and have repeatedly asked us why participants can't invest directly in mutual funds and instead have to invest in mutual funds through a separate account (BECAUSE IT'S THE LAW FOR AN INSURANCE COMPANY - who must "wrap" investments in an insured product and CAN'T sell investments directly! DUH!). It's scenarios like this that cause clients to look elsewhere....

The DOL officials were a local office senior investigator, and a National Office representative - and the inquiry was in connection with a client who is under audit. Many topics were covered, but with respect to the issue at hand, the inquiry started with respect to mandatory cash-out processes,missing participants, and the efforts undertaken by the plan sponsor (fiduciary) or as directed by the plan sponsor to us (non-fiduciary bundled service provider). The conversation morphed into practices that involved lost or potentially lost participant (i.e. processes when statements are returned with bad addresses and the like). Part of that then dealt with beneficiaries of known deceased participants, and how the plan sponsor contacted them to ensure the plan "knew" who had beneficial interests in the plan. My take on that conversation had to do with both ensuring RMD rules on death were handled appropriately, and also ensuring that no "wasting" account balances existed - without someone controlling the investments/upon whom the annual fee disclosure would be served - both of which are fiduciary issues. This has been one of the most extensive audit's I've ever seen - topped only by a DOL audit of another client going on simultaneously (different local office, but including National as well) that is about 3 months ahead of this one - but concentrating on the same issues (and has been going on for over a year without end in sight).

Just say "no." A DRO can't otherwise alter the operation of the plan - which requires (I assume - as every plan I've seen over 35 years in the biz requires) a SIGNED distribution election form AND tax notice - which applies to an alternate payee as well. You're in the driver's seat here.

It's legal (under some conditions) and it's a way for the employer to turn a non-taxable dividend payment into a deductible one (whether or not the participant take the cash or reinvest - just by giving them the choice gives the employer the deduction on dividends paid "through" the plan).

Then I would expect the PA to actually have records to prove it. Scanners and hard drives are cheap.... The company I currently work for (a service provider) seems to keep records forever. We routinely look up information for beneficiaries on old voluntary TDA accounts from the 40's and the 50's. Those are in storage in the basement of our tower and fairly easily retrievable within a few hours of requesting it. Anything new is online in a document management system. And by the way, I have "mailed" old statements to a PA when I used to do estate work as a "real" attorney. Heirs would come to me with shoe boxes of stuff, and we had to determine with certainty what the estate assets were. Never had anyone say "are you nuts? That was decades ago." Most often, the reply was benefits were "paid" by whatever and whenever. I never got a "we don't know."